information | analytics | expertise © 2014 ihs / all rights reserved from the taming of chance to...
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Information | Analytics | Expertise
© 2014 IHS / ALL RIGHTS RESERVED
From the taming of chance to unleashing serendipityIntroductory remarks on the changing role of data in advertising
BRUSSELS, 09 NOVEMBER 2015
Daniel Knapp, Senior Director Advertising [email protected]@_dknapp
© 2014 IHS 2
Mortality, normal distribution & the taming of chance: ‘big data’ changes how we make sense of the world.
Source: Wellcome Library, London. Bills of Mortality form August 15 - 22, 1665. High death rate from plague. 1665. Under CC BY.40
© 2014 IHS 3
The holy grail: from averages to individuals, or replacing the marketing of sameness with the marketing of difference.
© 2014 IHS
59% of online advertising in Europe to be generated through programmatic transaction models by 2019
Europe 2015 Europe 2019 United States 2015 United States 20190%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
71%
41%
55%
34%
9%
19%
9%
14%
20%
40% 36%
52%
Online net ad revenue by transaction model
Traditional Non-RTB RTB
© 2014 IHS
Ability to develop unique 1st party data and build massive consumer reach are competitive differentiators
Apple (Q3 2012-Q1 2015)
Facebook (Q3 2012-Q1 2015)
Google (Q3 2012-Q1-2015)
0
200
400
600
800
1,000
1,200
1,400
1,600
Active 1st party consumer data assets (m)
ID with credit cards Monthly active users Cumulative Android activations
+84%
+43%
+100%
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© 2015 IHS
Value in advertising shifts from those who have content & audiences to those who own, manage, interpret data
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Adver
tiser
Agenc
y
Tradi
ng d
esk
DMP/D
ata
prov
ider
DSP
Ad ex
chan
ge
SSP/Ad
netw
ork
Publis
her
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%$1.00
$0.29
$0.10$0.05
$0.15
$0.12
$0.15
$0.1415%
40%
15%
20%
Ad spend flow in new digital ad ecosystem*
*Illustrative only. Variances depending on deal negotiations, technology ownership. Refers to banner display advertising, assumes linear flow across all types of market participants listed. Data based on interviews with 43 ad tech companies, advertisers and publishers in Europe and the US (2014), and reviews of SEC filings by ad tech companies (e.g. Rubicon, Tremor, YuMe).
© 2014 IHS
In a data & algorithms arms race, ad tech funding surges
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140
100
200
300
400
500
600
700
800
900
Global Ad Tech Funding (USDm)*
OtherDMPExchangeSSPDSP
*Source: Crunchbase, company reports, GP Bullhound, IHS interviews & calculations. Excludes China. Excluding M&A.
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© 2014 IHS
Consumer spending patterns reveal access players’ incentives for entering the advertising market : legacy sector stagnation + data
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2012 2013 2014 2015 2016 2017 2018 2019
0
200000
400000
600000
800000
1000000
1200000
Global consumer spending and NAR on access, hardware and content (USDm)
NARSpend
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© 2014 IHS
Driven by M&A, a growing range of market participants taps into data-centric advertising technologies
*Represents full,majority & minority stakes. ND is non-disclosed. List non-exhaustive, focus on broadcasters & their competitive set.
Agency Online technology platform Broadcaster Cable provider
Date Company Acquisition* Value
July 2015 ProSiebenSat.1 Smartstream.tv (majority) undisclosed
June 2015 ProSiebenSat.1 Virtual Minds (majority) undisclosed
May 2015 Verizon AOL (full) $4,400m
February 2015 WPP Appnexus (minority) $25m
November 2014 Publicis Sapient (full) $3,400m
November 2014 Yahoo Brightroll (full) $640m
October 2014 Telstra Ooyala/Videoplaza (full) undisclosed
July 2014 RTL Group SpotXchange (majority) $144m
July 2014 Yahoo Flurry (full) undisclosed
May 2014 Google Adometry (full) undisclosed
May 2014 AOL Convertro (full) $89m
March 2014 Comcast FreeWheel (full) $320m
February 2014 Facebook Liverail (full) $382m
February 2014 Oracle BlueKai (full) $408m
August 2013 AOL Adap.TV (full) $405m
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© 2014 IHS
These deals are part of a broader imperative to build operating systems for the production, distribution, monetization of content & audiences
Facebook Amazon Yahoo Google Verizon WPP
Ad server or ad tech platform
FBX and Liverail (2014)
In-house demand-side platform
Yahoo Ad Manager
DoubleClick Adap.tv through AOL (2013)
XaxisVideologyAppnexus
Content production
In-house news team;Partnerships with media companies (NYT, National Geographic, etc.)
Amazon Prime
Yahoo original series; partnerships with CNBC and ABC news and NBC Sports Group
YouTube MCNs
Huffington Post (2011)
AOL.com
Techcrunch
Branded content agencies such as Group SJR
Gateway to video
Liverail Amazon Prime
Yahoo Screen & BrightRoll (2014)
YouTube (2006)
AOL OneAdap.tvVidible (2014)
Videology
Audience Data
Audience Network
Inferred Amazon data sets
Flurry (2014) Google+ profile data
Verizon customer database
Kantar (2008) & comScore
Analytics Atlas Platform (2013)
Amazon Analytics
Yahoo Ad Manager & Flurry Analytics
Adometry (2014) & Google Analytics
Convertro (2014)
Kantar
*Acquisitions are listed with the year in which they were acquired
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© 2014 IHS 11
The contexts in which consumers leave data become integrated, and this integration goes far beyond cookies.
Purchase data(Auto, CPG, Retail, etc)
Match data(Postal, Email, Cookie ID,
Mobile ID, etc)
Campaign data(Impressions, Creative
Info, etc)
ReachGRP
ViewabilityOCR vCE
EngagementClick-through-rate, Likes
DescriptiveShopper Behaviour
CorrelatedBuy-Through-Rate
CausalIncremental Sales Lift ROI
ProxyMetrics
PurchaseMetrics
Hol
istic
con
sum
er
unde
rsta
ndin
g
Data pools
© 2014 IHS 12
Emergent marketing technology builds bridges between offline customer & online data, helped by acquisitions.
Software companies with CRM products enter the advertising value chain
They are already making strategic acquisitions to cut across old data silos.
Example Oracle.
(CRM)
(CRM)
(CRM)
(cloud-based customer service)
(offline-online data conversion)
(online advertising data management platform)
© 2014 IHS
In Europe, publishers, advertising intermediaries and advertisers seek scale through data partnerships, yet alliances are mainly at national level
© 2014 IHS
Data as the central node in the new advertising ecosystem
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Technology Consumers
ContentAdvertisers
Global relationships with Agencies
and Brands
Global content
commissionsand licences
Brand fundedcontent partnerships
Global brandmanagement,
audienceaggregation, transparency and privacy
Global product
developmentfor apps and devices
Global R&D and infrastructure
Ad Tech & Mar Tech investment
Audiencemeasurement
& insight
DATA(individual,segment,
region / nation,global)
© 2014 IHS
Just two options for consumers - programm or be programmed?
• “We need to program or we will be programmed.” (Rushkoff)
• “We cannot just be users, consumers or prosumers. We have to break through the glass ceiling of the smooth interfaces and start programming.” (Lovink)
• Is code literacy is the new reading revolution? (Hayles)
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© 2014 IHS
Several approaches to reconcile data and privacy beyond ad-blocking, opt-in/opt-out have emerged
“Algorithmist”
Axciom initiative to let consumers access and review data stored about them (not all data, and not processed data).
Start-up $10m Series-A funding. Creators and consumers to jointly decide how content is paid for. Make formerly implicit agreement explicit.
Concept by Schönberger/Cukier (originated ‘right to be forgotten’ idea).• External algorithmist = allows
individuals to present expulcatory evidence
• Internal algorithmist = similar to ombudsman in organisation
Legal design. Visualise complex legal texts, T&Cs, data processing policies and present them in easy to understand, actionable way to consumers.
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